Source The plaintiff demanded seizure of shares worth more than 80 billion roubles and $14 million. Arbitration Court of Moscow dismissed an application of Far Eastern Shipping Company (Fesco Group parent company) for interim measures against businessman Ziyavudin Magomedov and several offshore companies for 80.1 billion rubles and $14 million, the court said in its ruling posted on its website.
Far Eastern Shipping Company PJSC asked the court to prohibit JSC New Registrar, as well as any other holder of the shareholders’ register newly determined by the shareholders of DVMP, to take into account votes of Cyprus companies Smartilicious Consulting Ltd and Envartia Consulting Ltd at the shareholders’ meetings when making decisions on issues of management and organization of the company, including profit distribution.
Besides, the plaintiff asked to attach the shares of DVMP in the amount of 80 billion rubles and $13.7 million, held in personal accounts, owned by the Cypriot companies. The court registered the claim on 25 October. The company justified the need for such measures in the lawsuit by the fact that if they were not taken, it could cause significant damage to the plaintiff.
Despite this argument, Natalia Konstantinovskaya, judge of the Moscow Arbitration Court, concluded that a purely subjective fear of a violation of the plaintiff’s rights and legitimate interests was not enough for the court to take interim measures. “Contrary to these requirements, the applicant failed to provide evidence of the reason for applying for interim measures and did not present any evidence to support his arguments,” the ruling reads.
Magomedov owns 32.5 per cent of DVMP. Another 26.5 per cent is owned by Mikhail Rabinovich and 23.8 per cent by Andrey Severilov. Apart from Magomedov, the defendants in the case are SGS Universal Investment Holdings Ltd (registered in the British Virgin Islands), Felix, L.P. (Cayman Islands) as well as Maple Ridge Ltd, Smartilicious Consulting Ltd and Enviartia Consulting Ltd.
The Fecso statement explains that the company’s financial audit revealed several debts “formed for the benefit of [this] group of companies and their beneficial owners”. “Previously, some shareholders had taken out loans from the company to repay their debt for the acquisition of PJSC DVMP securities. As these debts are now not being serviced, the management, taking into account the interests of all shareholders, has decided to collect the funds through the court,” the release said.
Fesco Group owns the largest container terminal in the Far East – Vladivostok Commercial Sea Port. The group also owns railway operator Transgarant and 22 transport vessels for cargo transportation by sea. The group’s revenue under IFRS in 2021 was RUB 113.7bn, EBITDA of RUB 47.5bn and net profit of almost RUB 37.9bn.
Magomedov and his partners bought a controlling stake in Fesco from Sergey Generalov at the end of 2012. The amount of the deal was not disclosed. But it is known that the main financing was provided by Fesco itself under the “leveraged buyout” scheme.
Ziyavudin Magomedov and his brother Magomed have been under arrest since March 2018. They are accused of establishing a criminal association, grand larceny and embezzlement. The amount of embezzlement, according to investigators, exceeds 11 billion roubles. On 19 October 2022, the prosecutor demanded that Ziyavudin Magomedov be sentenced to 24 years in a strict regime colony, his brother to 21 years, and a fine of 1.5 million rubles each. The Magomedovs do not plead guilty.
Fesco changed shareholders in 2020: Andrei Severilov and Mikhail Rabinovich bought the shares of Mark Garber’s GHP Group (owned 23.8% of Fesco) and American investment fund TPG Capital (17.4%). Magomedov did not support the deal and spoke of a raider takeover of the group.
In May 2020. Fesco sent a letter to Magomedov and TPG Group reminding them of the debt, RBC reported at the time, citing the document. The company demanded “as soon as possible” to repay the debt of $1.046 billion, which it gave for the purchase of shares in 2012, or to provide a payment schedule. In mid-September 2020. Fesco officially announced that it had filed claims with the London Court of International Arbitration against companies related to Magomedov, demanding the return of the loans issued to them.